And it’s official….the wrap on super drawdowns

We were super busy on Tuesday night with our heads buried deep amongst the 2022-2023 Federal Budget. While there was a small amount of something for most taxpayers, one of the anticipated announcements related to the continuation of the 50% reduction on superannuation pension drawdowns.

The Federal Government announced they will continue the extension of the current 50% decrease in the minimum superannuation pension payments until 30 June 2023. Whilst it’s difficult to describe this as a nation building policy but there will be many SMSF pension recipients quietly pleased that they can minimise their pension withdrawals for another year.

The below outlines the effect on self-funded retirees.

Age                   Min % until 30/6/2023         Min % after 1/7/2023
Under 65           2.0%                                    4.0%
65-74                 2.5%                                     5.0%
75-79                 3.0%                                     6.0%
80-84                 3.5%                                     7.0%
85-89                 4.5%                                     9.0%
90-94                 5.5%                                    11.0%
95+                     7.0%                                   14.0%

These rules may allow you to draw a smaller amount from your superannuation account-based income stream if you choose. A reduced level of drawdown could help sustain your retirement savings for a longer period, but this would come at the cost of reduced income for you.

Author

Kim Jay